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Sainsbury's the supermarket group yesterday said it planned to contract out its IT and payroll departments in a bid to increase efficiency

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Sainsbury's, the supermarket group, yesterday said it planned to contract out its IT and payroll departments in a bid to increase efficiency. Sainsbury's, the supermarket group, yesterday said it planned to contract out its IT and payroll departments in a bid to increase efficiency. About 800 computer workers and 45 wages staff will be transferred to separate outsourcing companies.But the supermarket group said that the staff would be employed on the same pay and conditions when they transferred to IT specialists Andersen Consulting and Rebus Human Resource.It added that the 800 IT employees would go to Andersen in order to give Sainsbury's ageing computer system a major overhaul.The contract will encompass designing, building, implementing and running of a new system operating across the supermarket chain.Sainsbury's chief executive, Sir Peter Davis, said: "The age and complexity of our current IT systems are hampering our ability to perform and develop and our required rate of change is made even more crucial with our ambitions for e-commerce."We currently spend in excess of £200m a year on our supermarket IT systems and operations."Sir Peter added: "It is essential that we get better value for money and through Andersen Consulting we have identified a customer-centric platform which gets us where we need to be and fast."Discussions are being completed with Rebus Human Resource to outsource Sainsbury's payroll operation.. The European Central Bank may have to scrap plans for another interest rate hike, the head of Germany's leading research agency warned, as it reported a sharp drop in business confidence. The European Central Bank may have to scrap plans for another interest rate hike, the head of Germany's leading research agency warned, as it reported a sharp drop in business confidence. The respected Ifo institute said its index of business climate for July fell to its lowest level for eight months, confounding financial markets' expectations of a rise. The index fell to 99.1, from 100.4 in June, and is the second consecutive monthly fall in confidence in Europe's largest economy.

The euro fell after the survey was released, dropping below the key $0.90 mark to hit a three-month low of $0.8976 against the dollar.Gernot Herb, Ifo's research chief, said the survey could be a sign that the ECB should keep rates on hold if the results were repeated across the other 10 members of the single currency zone. "The slowdown in the July survey could be a signal to the ECB to wait for a clearer picture," Mr Herb said.The Ifo report also recorded falls in its indices of current business condition and business expectations. The survey breaks a recent run of data showing strong economic recovery and rising inflation, which had prompted many analysts to pencil in a rise of 0.25 or 0.5 percentage points at either of the next two ECB rate meetings, on 31 August or 14 September. The announcement of the survey had an immediate impact on the euro. Robert Lind, an economist at ABN Amro in London, said: "The euro's response to the news was predictable but exaggerated. Even after today's falls, all three indices remain close to historic highs."Ralph Solveen, of Commerzbank in Frankfurt, said the survey would not diminish inflation worries at the ECB, which earlier this month warned of a threat of imported inflation stemming from a combination of rising oil prices and a weak euro.Analysts had expected the Ifo index to rise on the back of tax reforms by the German government, which have been welcomed as business-friendly.

"I don't believe that one can already talk about the end of economic recovery in Germany," Mr Solveen said.Private banks in the eurozone appeared to agree, bidding up the rates paid for ECB funds to almost 4.5 per cent, well above the ECB's current base rate of 4.25 per cent, in a sign the market expects an official rate hike as soon as next week.The rate is the highest since the ECB moved from a fixed rate to a variable rate system, under which it sets a benchmark, currently 4.25 per cent, but asks for tenders from the banks.. Scottish Media Group, the ITV to advertising poster concern, yesterday downplayed its interest in acquiring HTV, the Channel 3 franchise for Wales and parts of western England. Scottish Media Group, the ITV to advertising poster concern, yesterday downplayed its interest in acquiring HTV, the Channel 3 franchise for Wales and parts of western England. "There are prices at which we would like HTV and there are prices at which we wouldn't," said Callum Spreng, SMG's director of corporate relations. The chief executive, Andrew Flanagan, said SMG would be interested in buying HTV but stressed it would have to be at the right price.United News & Media sold HTV last month as part of a £1.75bn disposal of its three Channel 3 franchises to Granada Media. Broadcasting Act restrictions on the concentration of ITV viewership in media groups means that Granada will have to sell at least 80 per cent of HTV within six months of the acquisition of the United franchises, which formally closes at the end of September.Carlton Communications also displayed a cool attitude to a possible acquisition of HTV, which is contiguous to the London-based broadcaster's Westcountry franchise broadcasting to south-western England "Carlton won't overpay," said a source at the company. "If there's value, we'll look at it." He added: "There's no strategic imperative to this."SMG and Carlton's apparent determination to avoid a costly auction for control of HTV may work against Granada Media obtaining a top price for the ITV franchise.

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